Today, the Securities and Exchange Commission (SEC) charged Thomas Belesis, owner of independent broker-dealer, John Thomas Financial, and a Houston-based hedge fund manager, with defrauding investors.

The SEC said hedge fund manager George R. Jarkesy Jr., worked closely with Mr. Belesis to launch two hedge funds that raised $30 million from investors, and that as part of the scheme, Mr. Jarkesy led investors to believe that he was solely responsible for investment decisions.

However, Mr. Belesis directed some investments from the hedge funds into a company in which his firm was invested, according to a news release from the SEC. Mr. Belesis “also bullied Jarkesy into showering excessive fees on John Thomas Financial even in instances where the firm had done virtually nothing to earn them,” the SEC said.

“Jarkesy disregarded the basic standards to which all fund managers are held,” said Andrew M. Calamari, director of the SEC’s New York Regional Office, in the news release. “Not only did he falsify valuations and deceive investors about the value of their holdings, but he bent over backwards to enrich Belesis at the funds’ expense. Belesis in turn exploited the supposed independence of the funds to surreptitiously pull the strings on key decisions.”

If you were a client of Thomas “Tommy” Belesis, and/or his firm, John Thomas Financial, you may have a potential claim for recovery. Call Soreide Law Group for a free consultation with an attorney: 888-760-6552.

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Securities Lawyer, Lars Soreide of Soreide Law Group, PLLC, recently announced that he is investigating claims against Linsco Private Ledger (LPL Financial) for investors who have suffered losses by former LPL broker Alberto Neira.

The clients of former LPL representative Alberto Neira were solicited to invest in the now defunct Silver Oak Leasing – a business operated by Alberto Neira that was allegedly engaged in the financing of luxury cars in Southern California. These clients suffered a complete loss on their investment in Silver Oak Leasing.

FINRA, the Financial Industry Regulatory Authority, permanently barred Albert Neira in December, 2012, for defrauding at least fourteen investors, many of whom were LPL customers at the time they were solicited to invest in Silver Oak Leasing. This is also known as a selling away scheme. The following passage is from FINRA’s website: “Between July 1, 2008, and January 18, 2011, Respondent (Neira) made recommendations that resulted in over $2 million in investments in Silver Oak to at least 14 firm customers. These investments included stock and promissory notes. The customers understood that the invested funds were to raise money for the general use of Silver Oak’s business enterprise. The sales were conducted privately and not through Respondent’s employing firm. Respondent failed to disclose these securities transactions to his firm.”

If you invested in Silver Oak Leasing with broker, Alberto Neira, or with LPL Financial, call Soreide Law Group at: 888-760-6552, or you may visit our website and complete the online form at: http://www.securitieslawyer.com.

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In an article, Feb. 7, 2013, in the New York Post, it was reported that (broker-dealer owner), Anastasios “Tommy” Belesis’ firm, John Thomas Financial, is being investigated by the FBI, the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority Inc. (FINRA).

Mr. Belesis has made many media appearances on cable business/financial shows.

According to FINRA’s BrokerCheck, S.W. Bach & Co. fired him in 2005 for “inaccurate representation of identity to customer.” In 2001, a client sued him and a firm for $750,000 for churning and a FINRA arbitration panel later awarded the client $259,000. Mr. Belesis and firms he’s worked for have settled two other FINRA arbitration claims for nearly $100,000. Belesis paid $46,000 as his share of the settlements.

John Thomas’ FINRA record shows failures to disclose fees to clients about transaction charges. Arkansas Securities Department fined John Thomas $25,000 last year for allegedly not disclosing to clients handling fees for stock orders. The Connecticut Banking Department fined the firm $20,000 over similar failures on fee disclosures, and FINRA fined it $275,000 for “postage and handling” violations.

If you have been a client of Anastasios “Tommy” Belesis, and/or his firm, John Thomas Financial, and experienced financial losses call a securities lawyer at (888) 760-6552 or visit http://www.securitieslawyer.com.

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The Financial Industry Regulatory Authority Inc., also known as FINRA, is proposing to tighten its definition of “public” arbitrator. FINRA would like to exclude people associated with a mutual fund or hedge fund from its pool of public arbitrators and require others to wait for two years after ending an industry affiliation before being classified as a public arbitrator, writes Dan Jamieson in an article from the InvestmentNews.com.

On the Securities and Exchange Commission’s website, Finra said the change “would improve investors’ perception about the fairness and neutrality of Finra’s public arbitrator roster.”

FINRA is proposing a two-year cooling-off period for attorneys, accountants and others who have done a certain amount of work for securities industry clients, and for those who work for or serve as officers or directors of entities controlled by securities firms. This two-year wait would cover spouses and immediate family members of such individuals as well.

“In one instance, an individual applying to be a public arbitrator had retired one month earlier from a lengthy career at a law firm that represented securities industry clients,” FINRA said in its filing.

FINRA already has a five-year waiting period for former securities industry employees wishing to serve as public arbitrators, and bans those associated with the industry for at least 20 years from ever becoming public arbitrators.

Many feel Finra needs to go further and eliminate anyone who has had any connection with the industry as an arbitrator.

Securities Lawyer, Lars K. Soreide, of Soreide Law Group, represents clients nationwide before FINRA. If you or a loved one have sustained investment losses due to your stock broker or financial advisor’s recommendations, call for a free consultation on how to potentially recover your losses. To speak with an attorney call 888-760-6552, or visit our website at: http://www.securitieslawyer.com.

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With the stock market crash of 2008-2009 there has been an onslaught of investors filing lawsuits against their stock brokers and brokerage firms for providing them with unsuitable advice. There is a direct inverse correlation with stock index averages and new case filings. In other words, in a down market more cases are filed. Many of these cases had no merit and were largely suits over market losses, but a large percentage represented investors that were legitimately steered into investments products that proved to be illiquid, commission laden, or a complete fraud, such as a ponzi scheme. All of these claims against stock brokers and brokerage firms must be filed with the Financial Industry Regulatory Authority or “FINRA” for short.
Recently investors have been having success bringing FINRA arbitrations against brokerage firms for the sale of the following types of investments:

1) Reverse convertible notes- These were marketed as safe securities that produced an income that are typically linked to the common stock of a particular company and if the underlying stock drops, then the note converts to common shares, and unsuspecting investors who thought they had a fixed income product end up with large amounts of falling common stock they never wanted;

2) Fannie and Freddie Mac preferred shares -sold on and after their 2008 IPO where investors were told the investments were government insured when they were not;

3) Tenant in common or TIC investments- Investors were told to shelter their real estate profits by purchasing a TIC through a 1031 exchange but ended up paying excessive commissions that far exceeded any tax liability and ended up with an over leveraged illiquid asset;

4) Private Placements- Many of these investments have proven to be illiquid, commission laden, and lack material disclosures to the investors;

5) Account Churning- This is where the broker trades excessively in the account with a high velocity generating excessive commissions usually disguised to the investors as “mark ups” or “mark downs”. This is an extra “hidden” commission the investors do not usually realize typically this is coupled with an excessive use of margin; and

6) Overconcentration- This is where a broker recommends a high concentration in one security or one asset class which can result in unnecessary risk, especially if you are at or nearing retirement.

If you are an investor and you feel your stock broker recommended an inappropriate investment or investment strategy that resulted in significant losses, Soreide Law Group offers a free consultation and portfolio analysis to decide if you have legal grounds to pursue a FINRA arbitration. To speak with a lawyer call (888) 760-6552 or (954) 760-6552.

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The Financial Industry Regulatory Authority Inc. (FINRA) released its 2013 regulatory and examination priorities letter. The annual letter alerts the broker-dealer community to what Finra examiners will be looking for in the coming year. FINRA will continue to watch yield-oriented products this year but FINRA also will be focusing on business development companies (BDCs), exchange-traded funds (ETFs) and products that use leverage and the use of automated investment advice writes Dan Jamieson in an article for InvestmentNews.com.

FINRA is “particularly concerned about sales practice abuses, yield-chasing behaviors and the potential impact of any market correction, external stress event or market dislocation on market prices,” FINRA said in the letter.

With reference to BDCs, FINRA warned that they have “significant market, credit and liquidity risks” and risk over-leveraging illiquid portfolios with low-cost financing. Leveraged loans are relatively illiquid and hard to value, while CMBS and high-yield often carry higher risks than normal, given their historically low yields, Finra said. High distribution rates on closed-end funds attract investors who may not understand that some of these funds are returning capital, the letter warned.

FINRA’s notice also expressed concern about a “proliferation” of ETFs and ETNs that use leverage or track volatility measures, emerging markets and currencies.

For the first time this year, FINRA examiners will be looking at the use of automated investment advice.

Just because FINRA doesn’t include something in a current letter doesn’t mean examiners won’t be looking into it.

Securities Lawyer, Lars K. Soreide, of Soreide Law Group, who represents clients nationwide before FINRA. For a free consultation with an attorney on how to potentially recover your losses, call 888-760-6552, or visit our website at: http://www.securitieslawyer.com.

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The following information is from FINRA’s website under “Disciplinary and Other FINRA Actions, January, 2013.”

William Earl Manley (CRD #1177744, Registered Representative, Sarasota, Florida)

was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Manley consented to the described sanction and to the entry of findings that he failed to respond to a FINRA request for information regarding his arrest, felony charge and termination from his member firm. The findings stated that Manley advised FINRA he would not respond to a request for information.

(FINRA Case #2012031461701)

This ends the information from FINRA’s website.

If you feel you may have a claim against William Earl Manley, contact
Securities Lawyer, Lars K. Soreide, of Soreide Law Group, who represents clients nationwide before FINRA. For a free consultation with an attorney on how to potentially recover your losses, call 888-760-6552, or visit our website at: http://www.securitieslawyer.com.

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The Securities and Exchange Commission, also known as the ‘SEC,’ has filed 734 enforcement actions the fiscal year that ended Sept. 30, 2012. That is one less than last year’s record of 735.

The SEC’s report should remind investors that investment fraud is still a threat to investors. The SEC filed 147 enforcement actions in 2012 against investment advisors and investment companies, one more than 2011’s record number. The SEC filed 134 enforcement actions related to broker-dealers, a 19% increase over 2011.

On the positive side for investors, the SEC was able to secure more payments for the victims of the fraud. The SEC was able to secure over $3 billion in penalties and disgorgement in 2012 for wronged investors. This is an increase of 11 % over the 2011.

In 2011 and 2012, the SEC obtained orders for $5.9 billion in penalties and disgorgement for the investors who became victims of fraud.

Securities Lawyer, Lars K. Soreide, of Soreide Law Group, represents clients nationwide before FINRA. If you or a loved one have sustained investment losses due to your stock broker or financial advisor’s recommendations, call for a free consultation on how to potentially recover your losses. To speak with an attorney call 888-760-6552, or visit our website at: http://www.securitieslawyer.com.

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FINRA, the Financial Industry Regulatory Authority levied a total of $68 million in civil fines during 2012, according to statistics released by FINRA on Tuesday, January 8, 2013. This was slightly less than $71.9 million imposed by FINRA in 2011. The high-profile cases against large brokerages accounted for about one-third of total fines in 2012.

It was also noted that FINRA ordered brokerages to repay harmed investors a record $34 million.

FINRA oversees about 4,290 brokerages and 630,000 brokers.

Many of FINRA’s cases against Wall Street’s largest brokerages in 2012, including Morgan Stanley, Merrill Lynch, UBS, AG, and Wells Fargo Corp. These cases stem from FINRA’s increased interest in potential conflicts of interest and complex products, such as certain types of exchange-traded funds, said Richard Ketchum, FINRA’s chairman and chief executive, in an interview with Reuters.

These priorities “will result in more cases against large firms because they’re the ones engineering those products and the ones that have many of the conflicts because of their complexity,” Ketchum said. For example, brokerage units that underwrite offerings of certain risky products stand to profit when retail brokers in the same firm boost sales of those products by pushing them to investors, even though they may not be suitable.

Securities Lawyer, Lars K. Soreide, of Soreide Law Group, represents clients nationwide before FINRA. If you or a loved one have sustained investment losses due to your stock broker or financial advisor’s recommendations, call for a free consultation on how to potentially recover your losses. Visit our website at: http://www.securitieslawyer.com.

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Massachusetts securities regulators sued LPL Financial, LLC, in December over sales practices of brokers regarding the REITs. Secretary of the Commonwealth, William Galvin, charged LPL Financial with a failure to supervise registered reps who sold the nontraded REITs in violation of both state limitations and the company’s rules. The Securities Division also charged LPL Financial with dishonest and unethical business practices writes Bruce Kelly in an article in InvestmentNews.com.

These charges stem from the sales of $28 million of nontraded REITs to almost 600 clients from 2006 to 2009. The Securities Division found that 569 had regulatory violations. These included sales made in violation of Massachusetts 10% concentration limits; sales made in violation of prospectus requirement; and sales made in violation of LPL compliance practices. LPL received gross commission of $1.8 million for those sales, according to the complaint.

The InvestmentNews.com article goes on to say that the largest amount of sales was for Inland American Real Estate Trust Inc., the largest nontraded REIT in the industry, with $11.2 billion in real estate assets. Massachusetts investors put at least $20.1 million in Inland American, which is currently the focus of a fact-finding investigation by the Securities and Exchange Commission. Massachusetts is seeking full restitution to clients in the state who were sold REITs allegedly in violation of state and prospectus requirements. It is also seeking an unspecified administrative fine against the firm.

LPL Financial is the largest independent broker-dealer, with more than 13,000 registered reps and advisers. Along with Ameriprise Financial Inc., it is one of the largest sellers of nontraded REITs, which are sold only through independent broker-dealers. The investments are marketed as a way to diversify an investor’s portfolio and generate income.

Nontraded REITs, which had over $10 billion in sales in 2012, have drawn attention from regulators and the market recently. Many notable REITs took hits in 2008 and 2009 during the broad downturn of the commercial real estate market. Some of the industry’s largest REITs have suffered a drop in valuations of 25% to 50%, and some REITs have also cut dividends to investors.

Securities Attorney, Lars Soreide, of Soreide Law Group, PLLC, has represented clients nationwide. If you or a family member have experienced losses through LPL Financial, LLC, call a Securities Arbitration Lawyer for a free consultation on how to potentially recover your losses. To speak with an attorney, call 888-760-6552, or visit http://www.securitieslawyer.com.
Soreide Law Group, PLLC., representing investors nationwide before FINRA the Financial Industry Regulatory Authority.

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